How to Improve My FICO Score http://howtoimprovemyscore.com Tips and Tricks from those who have had to do it!!! Thu, 19 Aug 2010 03:52:20 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 Divorce and Credit http://howtoimprovemyscore.com/2010/08/18/divorce-and-credit-2/ http://howtoimprovemyscore.com/2010/08/18/divorce-and-credit-2/#comments Thu, 19 Aug 2010 03:52:20 +0000 Eleanor http://howtoimprovemyscore.com/?p=354 One of the biggest damaging items we’ve seen lately involves divorce. When you have a Dissolution of Marriage where one party says they will take responsibility for the account… that’s nice for the courts… but it doesn’t mean didly-squat (that’s right I said it!) when it comes to your credit report.  Just because someone SAYS they are going to take over the payments on a certain account does not MEAN that it will come off of your credit report!

Read this about a Single Mom and FHA Loans

If you are in this situation – call us!  Steve Thorne 919-649-5058  We can help you buy a house, and counsel you on the steps you need to take to protect yourself.

]]> http://howtoimprovemyscore.com/2010/08/18/divorce-and-credit-2/feed/ 0 WoWho! VA Does Not Requre A Credit Score! http://howtoimprovemyscore.com/2010/08/18/wowho-va-does-not-requre-credit-score/ http://howtoimprovemyscore.com/2010/08/18/wowho-va-does-not-requre-credit-score/#comments Wed, 18 Aug 2010 20:43:07 +0000 Eleanor http://howtoimprovemyscore.com/?p=30 va loan Well… I wouldn’t get TOO excited! According to the underwriters I’ve talked to lately  – even though the VA doesn’t require a Credit Score, clean credit for at least the last 12 months is required. Unlike Conventional loans, however, having a lower score will not change your mortgage interest rate with a VA loan!

If you’ve had a Bankruptcy – you can still get a VA Mortgage loan. You must be at least 1 year out of Chapter 13 and 2 years out of Chapter 7.  Most underwriters want you to have re-established credit and those “pesky” 12 months of clean credit.

Simply because you are eligible for a VA mortgage loan does not mean that you can get one.  You must still qualify for the loan... and just because the VA Mortgage loan program does not have a minimum credit score, doesn’t mean an underwriter (at the bank) is going to approve it.  For the most part, Underwriters are requiring Veterans to have at least a 620 score – and in most cases (as of 8/2010) they are looking for a 640 score.

For more information on Credit Score Requirements and how they are changing, click here.

If you have questions about VA loans, please contact Steve and Eleanor Thorne 919-649-5058.  We can help you with a Streamline refinance, or a purchase using your VA Home Loan Benefits.

]]> http://howtoimprovemyscore.com/2010/08/18/wowho-va-does-not-requre-credit-score/feed/ 5 Who Keeps Track of My Credit? http://howtoimprovemyscore.com/2010/08/12/who-keeps-track-of-my-credit/ http://howtoimprovemyscore.com/2010/08/12/who-keeps-track-of-my-credit/#comments Thu, 12 Aug 2010 18:33:29 +0000 Eleanor http://howtoimprovemyscore.com/?p=26 credit historyA credit report is an accounting of your credit history, and although it’s a bit confusing, Einstein did NOT make the system up!

Your credit report records:

  • Payment histories and amount of time accounts are open.
  • Request for credit (inquires),
  • Results of legal proceedings and personal data (like where you live and tax collections)

There are three major credit reporting agencies (or repositories) and each uses its own scoring model.  The three major credit reporting agencies use the following scoring models:

  • Experian – FICO (Fair, Isaac and Company)
  • Equifax – Beacon
  • TransUnion - Empiricacredit scores

You are not “born” with a credit score – and it’s not something like your social security number you “apply” for. Your credit score is an ever growing / changing number based upon your history.  The score is a 3 digit number and typically ranges from 350 to 850.  (Theoretically it is possible to have a score of 0 or 999).

Credit Scores were credited in a effort to take the “personal, subjective” analysis out of obtaining credit. A  credit score is considered a more objective way to determine oveall credit worthiness.  Statistical analysis removes the subjective, judgemental aspects of determining whether credit should be granted.

The 3 digit score estimates a consumer’s willingness and ability to repay a debt based on previous behavior. A score of 500 indicates that the consumer has a statistical 50/50 probability of repaying a debt.  This is why the current “minimum” scores needed for the “best rate” mortgage programs is close to 700!

Fortunately, the FHA Mortgage Loan program will accept scores in the low 600 range!  For more information on credit and how to qualify for a mortgage loan Call Steve and Eleanor Thorne, 919-649-5058!

]]> http://howtoimprovemyscore.com/2010/08/12/who-keeps-track-of-my-credit/feed/ 1 Do U Need A Repair Co? http://howtoimprovemyscore.com/2010/08/10/do-u-need-a-repair-co/ http://howtoimprovemyscore.com/2010/08/10/do-u-need-a-repair-co/#comments Tue, 10 Aug 2010 19:24:18 +0000 Eleanor http://howtoimprovemyscore.com/?p=21 mortgage rates bad creditI don’t play the lottery – but I know plenty of people that do… and from what I hear, there are no Guarantees that you are going to win as you purchase your ticket. The same thing is true with Credit Repair Companies.

There are TONS of ads for credit repair companies claiming that they can ERASE your bad credit… they have a bridge to sell you and they can guarantee you’ll win the lottery!

If it sounds too good to be true… it probably is!

Don’t pay a credit repair company to do something you can do for yourself. Most companies only guarantee that they will take 25% of the bad credit off your report!  Inaccurate items on your credit report can be removed and that’s where you should start.

The first step is to obtain a copy of your credit report. You can do this by contacting Experian, TransUnion, and Equifax. Unless you suspect fraud on your report – there’s no need to sign up for monthly monitoring for these reports – just get the free annual version.

So many Attorney and Credit Repair companies are telling folks the “holy grail”to easy credit fixes comes with a basic dispute letter... the credit bureaus are sending them back as Spam and possible Fraud.

If you want to buy a house, or a car, or open up a business… and you REALLY REALLY want help fixing your credit – call Steve and Eleanor Thorne, 919-649-5058. We help folks every month who have been turned down before because they need help to improve their credit score.. and we are able to help them purchase the home of their dreams!

Does it happen over night?  No – but we CAN help you! 919-649-5058

]]> http://howtoimprovemyscore.com/2010/08/10/do-u-need-a-repair-co/feed/ 14 Credit Card Fees Are Goin’ Down! http://howtoimprovemyscore.com/2010/06/22/credit-card-fees-are-goin-down/ http://howtoimprovemyscore.com/2010/06/22/credit-card-fees-are-goin-down/#comments Tue, 22 Jun 2010 14:22:25 +0000 Eleanor http://howtoimprovemyscore.com/?p=360

Your interest rate on your credit cards could decrease if your rate was increased after January 1, 2009. Your credit card issuer is required to review your account and lower your rate if the circumstances that led to the increase have improved. The Federal Reserve issued new rules last week regarding Credit Cards, and they are ALL good news to those of us who use credit! The new rules go into effect August 22, 2010. For information on some of these changes (like those “Free Credit Reports that just AREN’t) , click here.

  • No more $39 late fees on Credit Cards! Last week, the Federal Reserve issued rules that put more limits on credit card late fees and other fees. Under this new rule, the fees will be based upon how long it’s been since you were last late.  So the first late fee can be as much as $25 or $35 if you’ve been late within the past six months.  Credit card issuers may be able to charge a higher late fee if they can prove that payment delinquencies cost them more than $25/$35.
  • Remember, you must agree to be charged an over-the-limit fee… meaning you must say that you are willing to pay a fee if they are willing to extend credit over your credit limit. The new fees apply to all credit card violations, including over-the-limit transactions.
  • Penalty fees can’t exceed the amount of the violation. For example, if a $5 charge pushed you over your limit, your fee can’t exceed $5. Similarly, if you were late on a $15 minimum payment, your late fee can’t exceed $15.  We expect minimum payments to increase so that the late fee they’re able to charge can go up.
  • Buy a tank of gas with your credit card… We suggest using your credit cards at least once every 6 months, and then pay the charge off… Beacause Inactivity fees – charged when your credit card has been dormant for a period of time – are no longer allowed. However, your credit card issuer is still able to close your credit card for inactivity, which could cost credit score points, so again, use the card every 6 months or so.
  • Credit card issuers are now required to give you an explanation for increasing your interest rate.

Just because the penalty for missing a payment is not as high – doesn’t mean you should stop making payments on time.  Credit is one of the most valuable things you have!  The other consequences still stand. You could trigger a penalty interest rate increase and the late payment might hurt your credit score.  Same thing goes for exceeding your credit limit.  Remember if you’re late more than once within six months, your late fee could be as much as $35.

If you are considering a purchase of a home, or your need to refinance a home or a car… you probably need better credit.  We can help improve your credit score so that you can get back to where you want to be with credit!  Call Steve Thorne, FFSi, 919-649-5058 for help with credit repair and improve your FICO score today!

]]> http://howtoimprovemyscore.com/2010/06/22/credit-card-fees-are-goin-down/feed/ 0 How Foreclosure, Short Sales and Bankruptcy Affect Credit Scores http://howtoimprovemyscore.com/2010/06/15/how-foreclosure-short-sales-and-bankruptcy-affect-credit-scores/ http://howtoimprovemyscore.com/2010/06/15/how-foreclosure-short-sales-and-bankruptcy-affect-credit-scores/#comments Tue, 15 Jun 2010 16:10:25 +0000 Eleanor http://howtoimprovemyscore.com/?p=348 Want to know what is hurting your scores the most??? There’s a scoring system that each repository uses, so TransUnion calculates scores a little differently than Equifax and Experian.

FAIR ISAAC Damage Points – per FICO.com:

  • “Maxxed out credit card” – 10 to 30 points
  • 30 day late payment will cost you 60 points
  • Bankruptcy hits your scores for 130 to 150 points
  • Foreclosure will damage your score by 85 to 105 points
  • Debt Settlement service (like a Consumer Counseling Service) will cut your score by 45 to 65 points.

Those are for an average score of 680.  If you have a great score 780 then you get hit TWICE as bad!

Impact of Foreclosure on your Credit Score

There are three types of Foreclosure.  You can do a Deed in Lieu, a Short Sale or a “straight up” Foreclosure.

Short Sale have less of an impact than Foreclosure, because the CDIA does not have a code for a short sale.  In addition, IF the Realtor is able to properly negotiate with the Bank, the deficiency balance should be FORGIVEN.  If this is the case, you will have late mortgage payments, but it will not show on your credit report as a “straight up” foreclosure.

If you go through a Foreclosure OR a Deed in Lieu, it will show on your credit report as an “8″ – which means Foreclosure. Again, this is about a 100 point hit, and you will likely be required to wait at least 3 years to purchase another home.

Loan Modifications for the first 90 days will lower your score. It’s reported as a partial payment.  It’s only for a 3 month period.  Supposedly the hit to the score is not as bad as foreclosure.  Fair Isaac is looking to see if they need to make a change to modeling based upon modification.

If you have questions about how to recover from Foreclosure, a Short Sale, Bankruptcy… or any other credit crisis… please call Steve Thorne, FFSi, 919-649-5058. We will help you through this so that you can purchase a home, or buy a car.  This period in our Country’s History is unique.  We want to help you improve your credit score.

]]> http://howtoimprovemyscore.com/2010/06/15/how-foreclosure-short-sales-and-bankruptcy-affect-credit-scores/feed/ 0 Your Balances and Best Scores (part 3) http://howtoimprovemyscore.com/2010/06/08/your-balances-and-best-scores-part-3/ http://howtoimprovemyscore.com/2010/06/08/your-balances-and-best-scores-part-3/#comments Tue, 08 Jun 2010 15:20:56 +0000 Eleanor http://howtoimprovemyscore.com/?p=342 We’ve been doing a series on Credit Score Basics, and how to get the best credit score… for the first part click here – and for Part Two of the series, click here.  This is a TON of free information on how to improve your FICO credit score.

Maximizing Your Balance for the BEST Credit Score

With regards to how much your balance should be as compared to the actual high limit… the current model says that 25% – 30% of available credit is the optimum number. So keeping a zero balance on all of your debt will NOT help your score!  You need to have about a 30%  ratio.

Dusting off your “older” cards will raise your scores as well. They must be used every 6 months to count in your score. Pay it off – but use the card every 6 months or so.

If you don’t have a long history of credit – then inquiries and the number of accounts you have are more important. Inquiries stay on your report for 24 months, but they impact your score for only 12 months.  Again,  if you are “new” to credit – you also want to be sure you have at least 3 trade lines and it would be a good idea to have a mix of revolving and installment debt.  Sometimes Credit Unions will only report to ONE of the three repositories – ask your credit union before you seek them as the only credit card you have.  You need a history of at least 6 months on all 3 repositories.

Scoring Models do react favorably to paying ahead your installment debt. Not only does it like the fact that your high balance and current balance are further apart, the scoring model appreciates the willingness of the consumer to pay your debts off faster!

Transferring debt to a new Credit Card might make perfect sense – however from your score perspective, for the first 6 months of having that new account your scores will not improve. Do not close the old account, keep your 30% balance on the new card…

Your Home Equity Line of credit could be hurting your credit score! If you have a credit limit on your equity line of $75000 and you are USING $60000 – well, that’s not a 30% balance!  I’d never really seen this make a difference until lately…

If you want to improve your credit score – contact Steve Thorne, Credit Repair Specialist.  We do not charge a monthly fee, and we do not use outdated tactics that don’t work.  Call us today – 919.649.5058

]]> http://howtoimprovemyscore.com/2010/06/08/your-balances-and-best-scores-part-3/feed/ 0 How Scores Work (Credit Score Basics 2) http://howtoimprovemyscore.com/2010/06/02/how-scores-work-credit-score-basics-2/ http://howtoimprovemyscore.com/2010/06/02/how-scores-work-credit-score-basics-2/#comments Wed, 02 Jun 2010 14:11:26 +0000 Eleanor http://howtoimprovemyscore.com/?p=334 We are doing a series of posts on how your credit score works… meaning, how do they come up with the number? We covered the fact that there are different “Models.”  This means that not only do the three repositories (the “data banks” of information which is really what the 3 credit bureaus are) have different ways of coming up with numbers… they come up with different numbers for your Medical Credit Score, a Mortgage Credit Score, an Insurance Credit Score, a Retail Credit Score – and the one they use if your a looking for a job!  (there might be others these are the ones I am familiar with).

As of  March 2010 Credco analysis shows the average credit score in America is now 690. WOW!  The other interesting thing to me was how many people did not have enough credit to have a score!

With a mortgage credit report, we get a Score Factor with each report. The “factors” tell us what is the most important item we can do to raise your score.  These factors are based upon how you look when compared to other people with similar credit.  So if you are in Bankruptcy you are scored with people who are also scored against them – not someone who just started into the Credit “System.”  The primary “buckets” or pools of people you could be grouped in are:

  • People who are trying to Acquire (get) new credit
  • People who have the same Types of credit in use (are you a big credit card user?  Do you have 3 cars payments? that sort of thing)
  • People who have a similar Payment History as you do
  • People who have about the Amount of Debt as you have versus the High Credit Limit you COULD borrow
  • People who have  about the same Length of Credit History…

The thing that takes the most impact on your score is Payment History – and then it’s weighted based upon what you’ve missed a payment on. Collections, Judgements and any other public records really do pound your score.  And finally the length of time since you were late.

Time and distance since the derogatory reporting is really going to be what helps you.  Paying a Collection off might be needed to get a mortgage loan – but that doesn’t mean it will help your score. Click here for more info about paying collections off (or not).

Don’t let Bad Credit stop you from buying a home!  We can help you raise your credit score! Call Steve and Eleanor Thorne 919-649-5508 – we will give you real answers about improving your Fico Score.

]]> http://howtoimprovemyscore.com/2010/06/02/how-scores-work-credit-score-basics-2/feed/ 0 Credit Score Basics – Part 1 http://howtoimprovemyscore.com/2010/06/01/credit-score-basics-part-1/ http://howtoimprovemyscore.com/2010/06/01/credit-score-basics-part-1/#comments Tue, 01 Jun 2010 12:25:46 +0000 Eleanor http://howtoimprovemyscore.com/?p=300 We were able to ask Ken Venable with CREDCO about FICO Scores and what the fallacies and models used today. We are hoping to clear the air – because there’s so much information available now… and some of it is just plain misleading.

For instance the “Free Credit Score.com” jingle that folks listen to, and then PAY for doesn’t have a matrix that is anywhere close to the “Mortgage” matrix we must use to score you! We’ve seen many people who thought their credit score was “up” to 640 – when we pulled it and found that the score was actually 618, the customer thought we were crazy!  We weren’t… there’s just a difference between a Mortgage Report Score, A Medical Credit Score, and a Retail Credit Score.

Each credit bureau uses a “Score Logic” that is slightly different from one agency to another. Meaning that if 4 different people pull your credit, you might get a slightly different score – especially if the person pulling your credit doesn’t note that you are a junior… or if they have the wrong zip code!  That’s right, entering the wrong street address can change your score, slightly.

A credit report is just a snapshot in time… think about someone taking a picture of you in one day.  Well, they might get a picture of you at Starbucks, at your desk, in a meeting – you move during your day. Creditors can submit information to the Bureaus on any given day at any given time – so the snapshot (or pull of your credit) on a given day by different people might have slightly different scores.  It doesn’t happen often – but it can happen.

Bad Credit costs you money every month.  To see how much you’re spending on Bad Credit, click here.

If you are ready to improve your FICO score, call us.  We want to help! Steve Thorne, FFSi, 919-649-5058.

]]> http://howtoimprovemyscore.com/2010/06/01/credit-score-basics-part-1/feed/ 0 Credit Scores Across the Country http://howtoimprovemyscore.com/2010/05/28/credit-scores-across-the-country/ http://howtoimprovemyscore.com/2010/05/28/credit-scores-across-the-country/#comments Fri, 28 May 2010 14:57:20 +0000 Eleanor http://howtoimprovemyscore.com/?p=328 Ever wondered where the folks in NC stack up when it comes to credit? According to Karma Credit – we are (on Average) a little lower than folks in Virginia -and a little higher than folks in South Carolina.  I mention this because most “free credit report” services don’t offer you a score… and they aren’t free.

Karma does give you a score – but it’s not a FICO score. It’s based upon other Scoring Models.  So a number you get from this report will not be the same as the number I have from a Mortgage Report… but it’s still interesting!

courtesy of Karma CreditIf you are interested in getting your credit scores up to the Average – call us!  We help people improve their FICO score!  Steve Thorne, FFSi, 919-649-5058

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